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tv   Power Lunch  CNBC  March 25, 2013 1:00pm-2:00pm EDT

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tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today. >> take a. >> take a look at the markets. down about 93 points. our thanks to todd wagner who spent the last half hour with us. thanks to jill lewis and everybody for being our host down here. power lunch picks up the ball right now. >> halftime is over. power lunch and the second half of the trading day start right now. >> boy does that sunshine look awfully nice for those of us here in the northeast. getting ready for another snow and rainstorm. what happened to the market there? we started off on a promising
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note. within one point of a record high. watch out. investors cheering that cyprus deal but then some commentary makes that deal details seem a little less good than we might have thought. we're talking about the great and powerful. not oz, the great and powerful godman. that company without with a slew of ratings today that are rocking perspective stocks. we will dig into those a little later. even if you are years away from retirement, there is a fellow here, speeding along, you might want to consider buying property in a retirement community. younger people, yes, younger people, are snapping up great deals in retirement communities. find out whether that real estate play might be right for you. >> all right. we're down triple digits right here. let's take a look at what's moving right now. the banks getting smacked big
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time. you can see bank of america and citi all down. one of the biggest losers in terms of percentage moves was bank of america early on. and despite the move in dell which has been off quite a bit, the stock's highs today, pfizer, johnson & johnson and target were all on the list. that's not all. pfizer, verizon, and wall greens all hit highs. what the heck happened? >> a little of this was a sell on the news. moved up and quickly down at the open.
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the dutch finance minister said something and everybody said what the heck does that mean. then also go to the ininsured dpos it holders. inserting a real problem. take a look at the italian banks that got hit very hard. we have to watch every bank that we're in and you can see some of the declines here. the euro hit a four-month low. they would be beneficiaries because our banks are in better position than many southern european banks. a lot of people go from southern to northern european to u.s. banks. in terms of the sectors, a little more on the defensive side. consumer staples down the least of some of the major groups. >> kenney, come on in and join
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the group. bob mentioned the financials. what can happen in europe might eventually happen here in the united states. >> i don't suspect it really koul could happen but it gives investors an excuse to be cautious and take things off the table. we went right to the high and ran right into resistance. again, it gave people a chance to say let me take some money off the table and see where it goes. it's st end of the month. we will go into thursday with a little more to the upside but i don't think we're breaking any highs this week. >> if it really reflects european policy -- >> that's the big question. >> this is a victory for the moral hazard crowd. people claiming that endless bailouts are just wrong. but it introduces a whole new can f worms.
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>> it doesn't put the issue to sleep. only continues to bring it to the surface. >> what do you bring to the markets today? >> i think the market will end lower. it will churn all day and end here. there is no sense of panic but no reason to go out and buy new. it will -- we are stuck in that 1535, no reason to move out of it. >> appreciate it very much. >> sue, thank you very much. cyprus clenching that last minute bail-out deal if you want to call it that. the architect said that god is in the details and those details may be a little more gnarly than originally anticipated. and here is michelle with the latest. >> hey, there. absolutely. when you heard the previous discussion, saying that this rewards the anti-moral hazard
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crowd, that's exactly what this deal does. just like the markets are starting to deal with the situation, they are really reeling from the situation. protested all weekend because remember, this country went the other year peen countries and said can you please help us bailout our banks? europe this time said no. we're not going to bail out your banks. we're going to wipe out the equity and jr. bondholders. and by the way, the uninsured will pay as well. some people think that's a victory but now you see what happens to the italian banks. you have got make a closer inspection of where you're going to put your money. bank emmoies realize that many of them are going to lose their jobs. >> i have worked 23 years in the bank. i make my savings. i was planning and i have my
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plan for all of this and i wanted a better future for my children and i sent them to the uk for the quality of education there for a better future and maybe the chance to work. how is this criminal? to have dreams for my children and family and working hard every day. >> now in the meantime, the banks are still closed and there are reports that the two sick banks which should have been able to re-open tomorrow because the emp cb said they would provide liquidity says that they may not open until at least thursday. that would be 12 days with the major banks closed. people are going to the super markets. there may be a food shortage.
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why was this woman buying so much? she was from russia and she has seen this movie before and she fears shortages. >> you're originally from russia? >> yes, exactly. i have lived through this. uncertainties and yes, i'm worried. >> is that why you think you're doing this today? because you have seen this before? >> yes. i have seen how it develops and how quickly and badly it can develop. >> so the president of this country is supposed to appear any moment. he's usually late and might be worse because there is a meeting to try to figure out whether or not they can re-open tomorrow or thursday. the population is not going to take it much longer without being able to get cash.
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we spent a good time of the day trying to get money. it was exceptionally difficult. >> thank you very much. crisis averted? or maybe really not. we will find out. there is still plenty of uncertainty and turmoil. should your investment strategy change? let's bring in michael. how has the situation in cyprus and now the possibility that depositors in other countries if those banks go into real trouble they may be tapped as well. how is that affecting your investment strategy? >> i think it's very, very interesting. if you're in europe are you feeling optimistic? you're not. if you're in japan? no. even if you're in china, you're
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concerned about growth rate. what it does is the risk on trade is still there. but it's the more conservative risk on trade which meebs i think it will drive trades higher. if you're in spain or italy or cyprus our greece that you will have much confidence in europe at this point and that's why you will start to see flows in the united states. >> it's about money flows. you think the money will be expatriates from europe and other places and come into u.s. stocks? >> i do. what the united states is offer something a more stable environment. yes, of course, it's sluggish growth. and it also offers something call dividend. if you have bank deposits that will now be uninsured, where can you put your money? in the united states we have limits as well in terms of how much federal insurance we cover deposits. but if you put your assets in a company stock that has a solid
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balance sheet. yes, you will get flexuation but the dividend is a nice alternative rather than waking up and the government telling you that you lose 30% of your money. >> that woultd be a bad wake up call. so, now, check out the yahoo! finance question of the day. how are you positioning the international holdings in your portfolio? we'll bring you the results later in the show. let's go to josh with the market flash. >> check out thetanking now. the analysts saying that they are gaining on check point. conversations indicate a marketed increase in share losses in the past several months. sue, back to you. >> thank you very much. it's risk off today.
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we're off 116 points right now on the dow jones industrial average. moments from now ben bernanke will address a group of top policymakers in london. investors will watch for any and all signs and perhaps some comments on what's going on in europe, too. steve describes what is on top of the agenda today. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade...
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>> fed chairman ben bernanke will be speaking later. >> have we really learned our lessons from the crisis? joining us now to talk about that more, steve leisman. >> it is argued that the world is not really in the middle of a currency war. and he distinguished between the
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colonel policies and the tariffs of the 1930s. large policies are designed to enhance domestic demand. these policies are not beg thy neighbor but enrich thy neighbor. says those nations benefit from growth in developed nations. >> he is saying i am not worried about policies of japan which have had an ifect. >> steve, thank you very much. >> sue, down to you. >> thank you. for investors trying to play a rise in interest rates, there is
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a focus on a tiny corner. of the income market called the floating rate debt. and how your money could be impacted. >> they are flocking to this so-called floating rate. investors poured $1.4 billions into these funds. companies are issuing near record levels of this floating rate debt to meet the demand and investors are asking for it. so let's say a company issues a billion dollar bond. that's on top of a three-month libor which is 29 basis points. that is above 1%.
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investors will get bigger returns. investors must take a discounted yield up. so if rates don't go up, they are stuck with an under performing investment. investors will lose if rates don't go up but it's more likely that the companies will lose. the quicker that happens, the higher the borrowing cost of things like that. all of which have been bowing to investor demands. >> if this is going get more and more expensive, why are they doing it at this particular
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point? >> you're seeing these aaa rated companies doing it. this is a new trend and it's because investors are asking for it. i'm not getting enough out of it. so you need to give me something that will eventually rise in cost. who doesn't believe that interest rates will go occupy. sue? >> thank you so much. john? >> to be every everywhere 4.5%. here is a statement that i have got from ebay. however, we do leverage a few cloud technology including open stack so that we can architect or infrastructure. what is interest something a system integrator today released
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fuel which is a set of tools making it easier for people to move to the open source standard for the data center. prayers are getting lennox. a number of other players in servers. >> thank you very much. when goldman sachs talks, investors listen. a couple of big name stocks getting socked by downgrades. the dough down 108 points on the trading session so far. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking
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this is awesome. [ male announcer ] yes, it is, business pro. yes, it is. go national. go like a pro. >> there is the dough, down 91 points. the s&p 500 after get iting -- d there is if euro versus the dollar. 128 monday is here and that means we will an loois the analyst. today's edition is goldman sack
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x. but reiterated buy ratings. let's take a look at the bank's year to date. up 26%. i like the call on citigroup. i think they are well positioned. if you look at the latest financial results. they got a new ceo that i think will really focus on the bottom line. bank of america i think is too much. so i agree with these calls. >> goldman downgrading that stock from buy to neutral.
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>> if you got in six month ace go you would have more than doubled your investment. but obviously it has been moving lower and it is down another 3% to day. i think the company will be broken up and sold in pieces. ai-gree with the downgrade. it should have been downgraded to sell. at least from a long term standpoint. in terms of new buyers, they are buying android and iphone.
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learning that the company is their top pick. appears to be a projected 14%. michael, what do you think of that one? >> i like comcast. they are really well positioned. i think the media is going be a place where there's going be leverage and opportunity for cash flow growth. i think you ire going have a rising middle class. i think finally broadcasters are figuring out how to do the online presence. and comcast is notorious for being very, very frugal and they will try to cut costs. >> we should point out that comcast owns nbc universal. after the break we're talking
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drugs. if you take generics, you really need to hear this. it could impact all pharma stocks.
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>> time for the close in the gold market. are we seeing inflows because of the turbulence or not? >> it's been a pretty choppy session and that's a great question. mixed price action as a result of the news coming out of sigh plu prus. we but cha changed later in the afternoon. the euphoria from subsiding. we saw gold moving higher. they want to know exactly what this bail-out means. some investors disappointed from weak demand growth. and silver is actually positive today. sue, back over to you.
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>> thank you. to bob now. >> just off the lows. >> down by 80 now. i think the point that you were talking about, everybody wonders what happens in cyprus, does it spread to the european banks? >> when the dutch finance minister put it out, he said that cyprus was a template for europe, that implies in a bank needs to recapitalize, you go first to the bondholders and shareholders and then to your uninsured deposit holders. it's thrown a lot of people for a loop. as i have been menging, the italian bankss have been hit pretty hard. you would think that u.s. bank
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would be helped by this. but they are all still down. i don't consider this a big move. but we're up about 5% on that group. a lot of technical talk. this is a two-day. an youds reversal occurs when you open above a high and close below it. so 1545 is where we were on friday we saw a little bit of selling accelerate. >> let's bring ken any into the conversation. one of the things that we have not mentioned is that it's a holiday shortened week and there are religious holidays occurring. the volatility ticks up as well. >> it could. like you said, below 20 is not
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anything to get worried about. that's why i think we are stuck in this range. unless over the last couple of days you get stellar u.s. macro data, which we could get. it could certainly put pressure on the marketplace. i don't see it happening. >> i know a lot of people poo poo what the rating agencies do. we may see them make moves on other countries. >> this will increase credit costs, for sure. i'm sure that will play into the re-evaluation. >> we may hear knit the next day or two. after all of this and certainly because the door is still wide open there is there is so much uncertainty is they will say you
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guys got get your act together. >> the euro is falling, the dollar is strengthening and we're off 84 points. >> gentlemen, thank you very much. we will see you a little later. and a sue over a cholesterol drug. bertha is following are. >> the announcement on days that these are on a deal at the supreme ourt. the deal could preserve some of the revenues. the right to bring its generic to market may 2016, four months after the patent expires. according to the company's release. the settlement needs to be approved by the ped ral trade
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commission. and another deal hurt consumers calling the pay for delay deal anti-competitive. the justices expressed concerned about the settlements but also questioned the case. of those that went to trial, the generic firms prevailed in less than half of them. 48% of cases. >> we only win 48% of the time if we take it to the conclusion of the case. if we settle, the consumer wins 76% of the time. that's a win win.
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>> before today, it was said that the settlement brings these drugs five years before the patent expired. >> thank you very much. what does all of this mean for generic drug makers and for big far ma today? >> this will allow a generic form to be sold in may of 2016. a 2016 launch was widely expected by the street. other generic drug makers are expected. profits could be exceedingly low. a couple of bullish sell sides.
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another continuing its move. that stock now up about 20% just over the past month. those are a couple of the movers we're watching here. sue, back to you. >> thank you so much. |to rick. not surprising when we saw the triple digit loss. how do we look now? >> many are surprised that the flows haven't been bigger or surprised that flows have not been larger. but it is what it is. yes, we have dabbled with 190. when was the last time we closed under 190? it was around march fourth and fifth area. this was the chart that gave everybody on this floor a rally good opening trade.
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let's zoo in on italy. tiler, back to you. >> rick, thank you very much. >> let's recap some headlines. best buy's founder richard shults is rejoining the company.
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is right now the worse performer in the s&p 500, down about a 5 3ers. yahoo! is requiring a mobile app for newsing aggregation. it was founded by a 17-year-old. plus face book's mark zukerburg, his latest start up aims to influence the political agenda in d.c. we will talk about all that and more when we go to the power run-down after this.
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>> home values are rising but they are still well off of their peaks in many places in states like florida. some are buying in unfamiliar and unlikely places. here is that story. >> at century village retirement community, senior citizens get in early for yoga. but not charlie. >> no. this is my little get-away place. >> at 56, he is neither a seen yore citizen nor a retiree. what he is is an astute buyer. >> i bought an apartment that was valued at around $75,000 and i picked it up for $20,000. so the value comes in the surroundings. it comes with the clubhouse and the peace of mind that i have some place.
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if i need to go there i can. >> from the height of the housing boom in 2006 to the bottom in 2011, home prices fell 53% according to now they are headed up again and that has created a great opportunity for buyers of any haj. while the median age may be coming down you still have to be 55 years old to live here. but that has not stopped younger investors from jumping right in. >> they see a significant up tick in property values increasing, and invin tory decreases. so they have opted to buy now. >> 10% of residents work full or part time. the vacancy rate for the community is around 20%.
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>> let's get you up to date with the market. the s&p 500 was flirting with an all time high. earlier on it came within one point of the record earlier today. the number you want to keep in mind for the close on the s&p 500, the all time closing high would be 156515 set wac back on october 9 of seven. this includes apollo group, mcgraw hill up 3. 33 and dell with two offers on the table is up better than 3%. driving down the s&p 500, red hat, ebay, and first solar up three.5%. >> high interest in dell just like sharks closing in on their
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prey. who is going win the battle? we will tell you what the other big fish are circling around the company. that's next on the power run down. >> all right. now to the yahoo! finance question of the day. how are you positioning your international holdings in your portfolio? 7% say they are increasing global stock exposure. 14% say decreasing. but 57% say they are keeping
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things just as they are. 22% say i'm going into cash. all right. let's see what's coming up on "street signs". >> yeah. you know the market taking a sharp u-turn after the initial positive response to the cyprus bail-out. more questions than answers right now. we will try tofect if i that situation for you. we will find out why. and do you own a belkin mobile or pc accessory? we have ideas on how to fight off all of the cheap knock-offs. back to you on "power lunch". >> it's an all california edition of our power run-down. julia is in the house. welcome, guys. fantastic. interest in dell intensifies.
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>> these other guys have their dee -- maybe he doesn't want to take on that much debt. >> what do you think? >> i think dell might partner. i feel like dell -- dell needs to be involved in the future of this company. i think it's interesting. the question is do they see potential in dell or will they just make money? >> we're going to take a break and come back with more after this short break including why you may want to think twice before hitting the road with your google glasses. all your important legal matters in just minutes. protect your family... and launch your dreams. at we put the law on your side.
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julia, this sounds logical for him. why not? it's a key issue in the silicon value. >> he has a lot of money to spend and he wants to make a difference. what he really cares about is immigration reform. all of these are things designed to boost the internet sector. >> some of the reports i read suggest that there are other heavies like john door who may be contributing this as well.
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>> so far he has already come out on education, immigration and on science. >> and it's really smart. >> one of the reports had a long time gop guy getting involved. >> watch out for the google glasses. the legislator says it's like wearing a computer. it's dangerous and similar to texting and driving chblt. >> i haven't signed up. you remember that science project thing? get away from him to do this.
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you know, the geeks are very excited. i'm hesitant about people driving with anything on their face that doesn't have to be there. i can understand it. maybe it will make people better drivers. >> maybe this would help for gps. i have a gps that is on the dash. it could be easier. at the end of the day, people are so distracted. you don't need another distraction. >> i agree. the less that is distracting you the better. >> amazon studios adding zom beeland to prime instant video.
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>> what amazon is doing is interesting. they will put them on. anyone can watch them and give comments and vote on which of these pilots you want to see developed into full series. and it's all about original content. amazon wants to build an audience that can compete with net flix and that means going after established brands. >> zom bees are the new vampires. >> so people go and vote. interesting. >> great idea.
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>> it's harder than it looks. >> it means that we have more options. >> all right. good to have you both here. fantastic. all right. tiger woods is number one in the world again. he has won his eighth arnold palmer invitational open. today he is number one. >> indeed he is. we're about two hours to the closing bell and we have had a dramatic improvement in the market. [ male announcer ] with free package pickup
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we are now down only 40 points, 2 on the s&p and less than 2 on the nasdaq. people can walk right behind me and tell me what they see and hear. we did that in the power run down. do you think that one of the reasons the market improved was some clarification of comments? ec


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